CHIMNEY CO., LTD.

Business Details

The Food & Beverage Business operates a diverse range of brands including "Hananomai," "Sakanaya Dojo," "Uosei," and "Taishu Shokudo Yasubee." It consists of directly-operated stores and franchise stores run by FC owners, with a total of 460 stores nationwide (as of the end of March 2026) across the Group. The business has established a fresh ingredient supply system leveraging purchasing rights at the Toyosu Market and direct contracts with farmers. For FC stores, the company employs its unique "turnkey system." This is the Group's core business, accounting for the majority of sales, and also includes the Contract Business (restaurant operations within welfare facilities under the Ministry of Defense and Ministry of Justice).

Recent Overview

Sales increased slightly, but operating profit declined sharply by 46.8% YoY due to rising store opening and labor costs

In FY2026 (ending March 2026), consolidated net sales increased only slightly to ¥26,365 million (up 0.6% YoY). Directly-operated existing store sales declined 0.5% YoY, as customer count fell below the prior year despite a rise in average spending per customer due to price increases. The company was unable to absorb rising costs related to store openings/renovations, labor, and various expenses, resulting in a significant deterioration in operating profit to ¥491 million (down 46.8% YoY) and ordinary profit to ¥537 million (down 49.1% YoY). The number of Group stores saw a net decrease to 460 at period end (475 at the end of the prior period), with 14 new openings and 29 closures. An impairment loss of ¥203 million was recorded. For the next period (FY2027, ending March 2027), the company forecasts net sales of ¥28,000 million (up 6.2% YoY) and operating profit of ¥500 million (up 1.8% YoY).

Key Products

Growth Drivers

• Continued recovery trend in dining-out demand driven by increasing inbound tourism demand
• Capturing seasonal demand through steady progress in year-end party and banquet reservations
• Aggressive expansion of the Sakana Sakaba Uosei format (promoting new store openings and format conversions as a growth format)
• Fresh ingredient procurement capability leveraging Toyosu Market purchasing rights and direct contract farmers
• Securing diverse talent and improving employee engagement through hiring of foreign nationals and enhanced training
• Strengthening competitiveness of existing stores through store brush-up (renovations, format conversions, repairs)
• Promotion of new format development and new store openings (planned for next period)

Risks

• Growing consumer cost-consciousness and selective spending due to continued price increases, with sluggish growth in walk-in customer numbers
• Cost pressure and margin decline due to rising raw material costs, utility costs, labor costs, and construction costs
• Increased caution in new store openings and risk of falling short of initial plans due to rising construction costs
• Continuation of the net decrease trend in store count, with closures (29 stores) exceeding new openings (14 stores)
• Risk of recording impairment losses (¥203 million recorded in the current period)
• Reduced earnings contribution due to declining sales in the Contract Business (93.2% YoY)
• Continued profit pressure from goodwill amortization of ¥463 million
• Uncertainty over earnings recovery given the forecast for a significant 50.5% YoY decline in net profit (¥250 million) in the next period